Saturday, June 30, 2012


The Supreme Court Decision on the Affordable  Care Act is a confusing set of concurrences and dissents.   The decision, written by the Chief Justice, concludes for a majority that the Act could not be constitutional under either the Commerce Clause (where he argues persuasively that application of the clause would "open a new and potentially vast domain to congressional authority") nor to the Necessary and Proper Clause of the Constitution.   In addition, he argues that while the individual mandate is within the broad powers to tax (even though the Congress conscientiously avoided calling the penalty a tax) the mandate is appropriate as a penalty. He said that the provisions of the Anti-Injunction Act (which only allows suits against taxes be accepted after the tax has gone into effect) do not apply here.  Finally, he argued with six other members of the court that the expansion of Medicaid with the severe penalties attached was an overextension of authority but could be cured by simply limiting the penalty to states to money advanced from the feds beyond current funding as that subject to penalty.   Roberts also makes the case that the Court cannot be assumed to be responsible for rescuing us from lousy policy making done by Congress, that is for the political process to do.   In each of those decisions, there is some point and counter point.

For example, while the Chief Justice argues that the penalty paid by persons who do not purchase health insurance is a "penalty" not a tax (and thus subject to the provisions of the Anti-Injunction Act) he does affirm the mandate as within the broad powers to tax.   My concern is that the rather elegant distinctions made in his written opinion could well be swept aside by another expansive view of the commerce clause, by simply calling the mandate a penalty.   Under Roberts' reasoning almost anything some politician thought was necessary would be proper.

In his majority opinion, the Chief Justice then goes on to cite the many problems created by the enactment.  He argues that the community rating reforms and guaranteed issue requirements "sharply exacerbate that problem by encouraging individuals to delay purchasing health insurance until they become sick, relying on the promise of guaranteed and affordable coverage."   In the next instance he says the act will impose significant new costs on insurers by limiting their ability to make actuarially sound ratings decisions.  

His discussion on the Commerce Clause is scholarly.   He says that the clause has always been applied only to reaching activity.  He makes a strong case that inactivity cannot be included - the "broccoli" argument.   He suggests that the "individual mandate, however, does not regulate commercial activity." He makes a strong case that Congress is prohibited from using its "commerce power to compel citizens to act as the Government would have them to act."   The slippery slope of the necessary argument (we need this because even people who are not involved in purchasing insurance are involved in health care) is rejected emphatically.    The Chief suggests that the proposition that "Congress may dictate the conduct of an individual today because of prophesied future activity finds no support in our precedent."   In this case, Roberts makes a clear case that the concept of enumerated powers, with the exception of taxation, is significantly proscribed.   That is an argument that is not supported by any of the liberals on the court.

Roberts argues that the "penalty" is indeed a tax, although not covered in the sense of the Anti-injunction Act.  And with that formulation he then dismisses the inactivity issue, which would be created in the commerce clause analysis, if the penalty is a tax.   People cannot avoid a tax by inactivity, even if they cannot be compelled to join in commerce.   Roberts tried to limit his analysis on taxation by suggesting that the ability of taxes to compel behavior is limited.   He suggests that the commerce clause gives Congress a better opportunity to regulate behavior than the tax power.   The opinion clearly argues that the Federal Government does not "have the power to order people to buy health insurance."  But the dissent points out the folly of that distinction.   Ultimately, individuals will be compelled to act in odd ways.  Roberts' opinion is hoisted on on a logical abyss.

In the Medicaid discussion Roberts' logic is even more confused.  He argues that "Permitting the Federal Government to force the States to implement a federal program would threaten the political accountability key to our federal system."   While I think his statement is correct, enactments like No Child Left Behind and many provisions in the health statutes have key elements of compulsion.   What Roberts argues is that the Medicaid expansion is a bridge too far.   He conditions that in part on the idea that Medicaid is a significant part of the total spending in states.  (Ginsberg notes in a footnote to the Roberts opinion that Medicaid spending will only increase by .8%).

From my perspective I think Roberts was trying to work on the legacy of the court rather than think about the issues before the court.   Clearly, he rejected almost all of the major issues proposed by the Solicitor General in his oral arguments and written briefs.   But support for his well reasoned decision was slight.   Support for the arguments about the Necessary and Proper and Commerce Clause came more from the four who dissented than those supposedly in the majority.    The strongest majority in the opinion was the seven justices who rejected the Medicaid funding coercion.

In one odd footnote to the decision, the Sacramento Bee and the New York Times this morning included an article that the Solicitor General whose performance in the case was so widely panned by both left and right, feels "vindicated."   I find that strange.  Mr. Verilli  argued that the Commerce Clause could be used and that the Necessary and Proper Clause was an appropriate exercise of power (a majority of justices disagreed).  He argued that the mandate was not a tax (a majority disagreed).   He argued that the involuntary expansion of Medicaid was appropriate (seven justices disagreed).   So the substance of his arguments were substantially rejected.   But the law was upheld.   Somehow pyrrhic victories come to mind.

At the same time Justice Ginsberg came up with a novel interpretation of the law.  The rest of the court's liberals signed on to part of this expansive argument.   While I will quote some of their reasoning below, it seems to me that Ginsberg's lead writing argued that the necessary and proper clause could be interpreted thusly "If I think it is necessary, it is proper.'   Justice Ginsberg's lack of appreciation of the limits of federal power is appalling.    Ginsberg argues that the huge expansion into health care is simply an extension of the growth of federal powers that started with the creation of Social Security.   She mocks the Chief in commenting that his "crabbed reading of the Commerce Clause harks back to the era in which the court routinely thwarted Congress' efforts to regulate the national economy in the interest of those who labor to sustain it."   She goes on to justify this expansion of power because health insurance is costly.  (Not sure where the Constitutional justification based on cost is found.  In reality that is a nonsensical formulation.)   She also says that the a more expansive reading of the Necessary and Proper clause can be justified because 50 million people are not consumers of health insurance. (And she infers that the reason for this number is that those people cannot afford to purchase insurance.  Unfortunately she makes this assertion without any evidence.)

What troubles me most about Ginsberg's notions is that she immediately concludes that just because there are problems in the health care market, Congress should have the power to establish a command and control solution.  She seems not to have even considered that there are plenty of other alternatives that would be possible without rolling over the Commerce and Necessary and Proper Clauses.   She even suggests that the solution created by the ACA was actually lesser than THE alternative which was single payor.  (Never considering that there could have been market based solutions that would be less violative of key constitutional provisions.)   Congress solved the problems of health insurance, according to Ginsberg, by requiring guaranteed issue and community rating but she says those remedies were not going to work unless you compelled individuals to participate in the market.   If it is necessary, it must be proper.  She also assumes that (from a quote I believe misapplied from the McCulloch case) that the Constitution would "change over time" - any constitutional scholar understands this but Ginsberg assumes that the constitutional limitations of powers are not immutable.   Obviously, there was not an internet, or even health insurance when the Constitution was drafted but Ginsberg also assumes that the framers had no knowledge of immutable principles that would guide regardless of changes in situations.   For example, while there was not heart bypass surgery at the end of the eighteenth century - there was knowledge of the moral hazards of an overly expansive government.   That is exactly the point that the framers made in constructing the idea of enumerated powers - which both Roberts and the dissenters seem to understand and which Ginsberg blithely ignores.  

What is also interesting to me is that Ginsberg then goes on to assume that the Court should not intervene in decisions by Congress.   She quotes a well known phrase from the Pension Guarantee case which from my view is not dispositive to the argument about whether the court has the ability to throw something out which does not fit within the broader principles that underly the limited nature of the Constitution.   As I said, I am appalled by this inability to understand that the Constitution is not an open-ended relationship between the governing and the governed.    Has Justice Ginsberg never read Federalist #51?  (But the great security against a gradual concentration of the several powers in the same department, consists in giving to those who administer each department the necessary constitutional means and personal motives to resist encroachments of the others. The provision for defense must in this, as in all other cases, be made commensurate to the danger of attack. Ambition must be made to counteract ambition. The interest of the man must be connected with the constitutional rights of the place. It may be a reflection on human nature, that such devices should be necessary to control the abuses of government. But what is government itself, but the greatest of all reflections on human nature? If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. A dependence on the people is, no doubt, the primary control on the government; but experience has taught mankind the necessity of auxiliary precautions.)   Ginsberg also ignores the potential negative effects of defective legislation (which Roberts' recognizes but then dismisses).   Ultimately Ginsberg assumes that health is a special market so other principles should not apply.   Ginsberg's ultimate judgement is that all of the act is just fine.   As noted above from my perspective that is an absurd position.

The four dissenters, who ultimately uphold the interpretation of the Chief on the Commerce Clause and the Necessary and Proper Clause, argue (I believe correctly and in opposition to Ginsberg's exuberant interpretation of congressional authority) that there are "structural limits upon federal power" especially as it relates to private conduct.   They point out that one of the difficulties in this area is that there are a group of individuals (people who are young and healthy) who choose not to buy insurance.  They suggest that "Congress' desire to force these individuals to purchase insurance is motivated by the fact that they are further removed from the market than unhealthy individuals with pre-existing conditions, because they are less likely to need extensive care in the near future."   But as the dissenters argue and the liberal side ignore is that there are plenty of alternative ways to nudge people into decisions which would be more community supportive.   For example, a few pages later the dissenters argue that people who did not purchase insurance could be compelled to pay a surcharge for insurance services if they chose to join the insurance pool later in life.    The dissenters also argue that  there are plenty of markets where non-purchasers can affect markets.  For example, people who do not consume broccoli will affect the market for broccoli - that is the very nature of markets.  While the emotional issues in health care are higher than the ones for broccoli - both are a demonstration of the responsive nature of markets and there the Constitutions has(in my opinion) wisely restricted the ability of Congress to compel behavior.   "If all inactivity affecting commerce is commerce, commerce is everything."   While I agree with the logic of the dissenter's concerns, I also recognize that Roberts' discussion that the Court should not be in the business of rewriting bad policy decisions.   In this case, I think the Constitutional hazards in the statute, which was a 900 page document that few people read (which is one of the reasons I read the decision so carefully), were so substantial that the better move would have been to declare the entire Act unconstitutional.   Contrary to Justice Ginsberg's rant about the limitations of the Court's power (one of the few areas where she seems to recognize limits on governmental authority), I believe the Court was well within its authority to throw the whole thing out.

The dissenters are passionate in their argument that the court cannot "rewrite what is not."   A tax is a tax not a penalty.  If it is a tax certain statutes apply.

One is drawn to whether the balance that I believe the Chief Justice tried to achieve was accomplished. I believe it was not.   The key decisions in the case (which threw out the arguments on the Commerce and Necessary and Proper Clause) were agreed to by Roberts and the four dissenters.  (And only partially by some of the other justices.)   The consensus that Roberts sought was not achieved except on a very limited notion that the Medicaid penalty was excessive.    Calling a penalty (which Congress declared the mandate to be) a tax does not change the fundamental effect of the mandate.   My objection to the ACA was that it had the potential to increase demand for health care without doing anything serious about increasing supply.   There is no reason to believe that the Solomon like decision of the Chief Justice did anything to correct the very real problems in our healthcare system.  In the best of circumstances both the liberals and the conservatives in Congress would spend some time trying to figure out how to improve a defective statute (which Roberts says is not the Court's job to do).   But what I fear is that the supporters of the ACA will claim victory and ignore the real problems of the Act (including the very real ones described in the four dissenter's opinion) and the opponents will try the symbolic but meaningless act of voting on repealing the statute.   We deserve better.

1 comment:

Cliff said...

Jon-I agree with your analysis. I was disappointed in Chief Justice Roberts opinion, not necessarily because of the result, but because in his attempt to protect the legacy of the court, he does so in a way that produces an opinion that at times seems fairly illogical in its reasoning. As such, I find myself feeling like I did after Bush v. Gore. When the Court strays from its overarching purpose of interpreting the law (for whatever reason), justice and jurisprudence is not served.